Supreme Court Rules Government Can't Keep Profits From Tax-Foreclosed Homes

Exterior of Supreme Court of the United States on First Street in Washington DC, USA with statue by James Earle Fraser titled Authority of Law (1935)

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If your local government seizes your property and sells it at an auction over unpaid taxes, they’re no longer allowed to keep the profits, the Supreme Court ruled Thursday.

In the unanimous ruling, the court sided with Geraldine Tyler, 94, a Minneapolis resident whose condo was seized by Hennepin County in 2015 over $2,300 in unpaid property taxes and $12,700 in penalties and interest. While tax lien foreclosures are well-established law, the controversial part was what happened next: the county sold her house at an auction for $40,000 and kept the difference.

Before Thursday’s ruling, that practice was allowed in 12 states plus Washington, D.C., according to research by the Pacific Legal Foundation, the nonprofit advocacy group representing Tyler in the case. The court found the practice was unconstitutional, violating the "takings clause," of the Fifth Amendment, which protects property rights.

“The principle that a government may not take from a taxpayer more than she owes is rooted in English law and can trace its origins at least as far back as the Magna Carta," Chief Justice John Roberts wrote. "The taxpayer must render unto Caesar what is Caesar’s, but no more."

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  1. Supreme Court. "Tyler vs. Hennepin County, Minnesota."

  2. Supreme Court. Supreme Court. "Petitioner's Reply, Tyler vs. Hennepin County

  3. ?Pacific Legal Foundation. “Ending Home Equity Theft.”

  4. Pacific Legal Foundation. “94-year-old grandmother fights home equity theft in Minnesota.”

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